News Releases
Azenta Reports Fourth Quarter and Full Year Fiscal 2022 Results, Authorizes $1.5 Billion Share Repurchase Program

 

  • Delivered on Expected Q4'22 Revenue of $138 million
  • Strong Double-Digit Organic Growth Excluding COVID for Q4 and Full Fiscal Year
  • Plan to Repurchase at Least $1 Billion of Common Stock Over the Coming Year, Including $500 Million Accelerated Share Repurchase Program
  • 30% Total Revenue Growth Expected in Fiscal 2023

CHELMSFORD, Mass., Nov. 14, 2022 /PRNewswire/ -- Azenta, Inc. (Nasdaq: AZTA) today reported financial results for the fourth quarter and fiscal year ended September 30, 2022.

 
 
   

Quarter Ended

 

Year Ended

   

Dollars in millions, except per share data

 

September 30, 

 

September 30, 

       

September 30, 

 

September 30, 

       
   

2022

 

2021

 

Change

 

2022

 

2021

 

Change

   

Revenue from Continuing Operations

 

$

138

 

$

137

 

0

%

 

$

555

 

$

514

 

8

%

   

   Organic growth ex-COVID impacts

             

12

%

             

17

%

   

Life Sciences Products

 

$

48

 

$

53

 

(9)

%

 

$

199

 

$

200

 

0

%

   

Life Sciences Services

 

$

89

 

$

84

 

6

%

 

$

356

 

$

314

 

13

%

   
                                         

Diluted EPS Continuing Operations

 

$

(0.07)

 

$

(0.30)

 

76

%

 

$

(0.15)

 

$

(0.39)

 

61

%

   

Diluted EPS Total

 

$

(0.28)

 

$

0.29

 

(195)

%

 

$

28.48

 

$

1.49

 

nm

     
                                         

Non-GAAP Diluted EPS Continuing Operations

 

$

0.16

 

$

0.12

 

34

%

 

$

0.51

 

$

0.48

 

6

%

   

Adjusted EBITDA Continuing Operations

 

$

9

 

$

21

 

(55)

%

 

$

62

 

$

86

 

(27)

%

   
 

Management Comments

Steve Schwartz, President and CEO, stated, "We exit fiscal 2022 having successfully transformed into a standalone life sciences business with significant opportunities ahead of us. We achieved strong double-digit organic growth of 12% in the quarter and 17% in the fiscal year, excluding estimated COVID impacts. In the fourth quarter of fiscal 2022, we regained momentum in our genomics business and saw sustained strength in large-automated stores, which posted another record bookings quarter. We remain focused on execution and on driving broader adoption of our unique offerings.

"We're also pleased to announce that our Board has authorized a new $1.5 billion share repurchase program and we intend to repurchase at least $1 billion of common stock over the coming year, beginning with a $500 million accelerated share repurchase. This program is a testament to our commitment to returning value to shareholders. It underscores our strong capital position, and our view that we have significant upside opportunity. Even with this meaningful repurchase of shares, we expect to have sufficient capital available to deploy for additional growth investment consistent with our long-term strategy, and we will continue to generate value for shareholders as we pursue opportunities to extend our industry leading position.

"We also announced that as part of our ongoing transformation we are nominating two new directors to our board. Both are outstanding life sciences executives with track records of creating value who will stand for election at our next annual shareholder meeting. These nominees will replace two of our directors who will not be standing for re-election."

Summary of Fourth Quarter and Full Year Fiscal 2022 Results

Revenue excludes revenue from the Semiconductor Automation business which was sold on February 1, 2022. Profits related to this business are included in discontinued operations. The Company has referenced in the explanation of revenue the estimated impact of COVID. Estimated impact of COVID includes the estimated revenue contribution from products delivered and services rendered to support COVID testing and research, and estimated constraints on the business due to disruptions in customer demand or the Company's ability to deliver in the COVID environment.

Fourth Quarter, Fiscal 2022

Summary of GAAP Results

  • Revenue was $138 million, flat year over year and up 4% sequentially. Year over year organic growth was 2%, which excludes over 4 percentage points of headwind from foreign exchange and a 3 percentage point contribution from the acquisition of Barkey Holding GmBH ("Barkey") completed on July 1, 2022.
  • Organic growth was 12% year over year when excluding the COVID impact in both periods. The estimated COVID impact was approximately $1 million in the fourth quarter of fiscal 2022 compared to a $12 million contribution in the prior year period.
  • Life Sciences Products revenue declined 9% year over year mainly due to lower revenue in the consumables and instruments ("C&I") business, partially offset by strong high-teens growth in our large-automated stores business. The acquisition of Barkey contributed $4 million to revenue. Organic revenue declined 10% year over year and was up 13% excluding COVID impacts in both periods.
  • Life Sciences Services revenue grew 6% year over year, with 9% growth in sample repository solutions ("SRS") driven by revenue from stored samples and 6% growth in genomics driven by next-generation and sanger sequencing. Organic growth was 10% year over year and up 11% excluding COVID impacts in both periods.
  • Operating loss was $15 million, a $7 million improvement year over year primarily due to the retirement of tradenames related to the rebranding of the Life Sciences business that took place in the fourth quarter of 2021. Gross margin was 42.3%, down 600 basis points year over year.
  • Diluted EPS from continuing operations was ($0.07) compared to ($0.30) in fourth quarter of fiscal 2021. Total diluted EPS of ($0.28) includes ($0.21) of diluted EPS primarily from tax adjustments in discontinued operations related to the sale of the Semiconductor Automation business. Other income included $10 million of net interest income versus a $0.4 million expense in the prior year period. Fourth quarter 2021 non-operating expenses included $16 million of charges for the release of a tax indemnification asset, which was offset within the tax expense with the reduction of tax liability.

Summary of Non-GAAP Results

  • Operating income was $2 million and operating margin was 1.5%, down 670 basis points year over year. Gross margin was 43.8%, down 580 basis points year over year. Operating expense in the quarter was $58 million, up $1 million year over year. Inflation, foreign exchange and product mix as well as incremental strategic investments for growth added pressure to the Company's margin performance in the fourth quarter of fiscal 2022.
  • Diluted EPS for the fourth quarter of fiscal 2022 was $0.16, up $0.04 versus one year ago. 
  • Adjusted EBITDA, which excludes stock-based compensation, was $9 million and Adjusted EBITDA margin was 6.9%, down 860 basis points year over year. 

Full Year, Fiscal 2022

Summary of GAAP Results

  • Revenue for fiscal 2022 was $555 million, up 8% year over year. Organic growth was 9%, which excludes a 2 percentage point headwind from foreign exchange and a 2 percentage point contribution from acquisitions.
  • Organic growth was 17% year over year when excluding the estimated COVID impact in both periods. The COVID impact was $22 million in fiscal 2022 compared to $53 million the prior year.
  • Life Sciences Products revenue was $199 million, flat year over year driven by lower C&I revenue offset by increases across all other business lines and the addition of Barkey in July 2022. Organic revenue declined 1% year over year and was up 13% excluding estimated COVID impacts in both periods.
  • Life Sciences Services revenue was $356 million, up 13% year over year, with 18% growth in SRS driven by stored samples and 11% growth in genomics with expansion across all major business lines. Organic growth was 15% year over year and was 18% excluding COVID impacts in both periods.
  • Operating loss was $25 million, a $6 million improvement year over year primarily due to the retirement of tradenames related to the rebranding of the Life Sciences business and a charge related to liabilities for tariffs related to imports in prior fiscal years that took place during fiscal 2021 and did not repeat in fiscal 2022, partially offset by inflation and investment in the business. Gross margin was 46.0%, down 150 basis points year over year.
  • Diluted EPS from continuing operations was ($0.15) compared to ($0.39) in fiscal 2021. Total diluted EPS of $28.48 includes $28.63 of diluted EPS from discontinued operations related to the sale of the Semiconductor Automation business. Other income included $16 million of net interest income versus a $1 million expense in the prior year.

Summary of Non-GAAP Results

  • Operating income was $28 million and operating margin was 5.1%, down 400 basis points year over year. Gross margin was 47.3% down 280 basis points year over year. Operating expense was $234 million, up $24 million year over year. Full year margins were impacted by inflation and strategic investments for growth as well as unfavorable foreign exchange and product mix weighing on second half results.
  • Diluted EPS for fiscal 2022 was $0.51, up $0.03 versus fiscal 2021.
  • Adjusted EBITDA, which excludes stock-based compensation, was $62 million and Adjusted EBITDA margin was 11.3%, down 550 basis points year over year.

Cash and Liquidity as of September 30, 2022

  • The Company ended fiscal year 2022 with a total balance of cash, cash equivalents, restricted cash and marketable securities of $2.3 billion.

Subsequent Events

  • On October 3, 2022, the Company completed the acquisition of B Medical Systems S.a.r.l ("B Medical"), a global leader in temperature-controlled storage and transportation solutions for approximately $422 million in cash, which includes an adjustment for cash acquired and other items. Additional cash consideration, up to approximately $50 million, may be paid upon achievement of certain future performance milestones.
  • Following the completion of the B Medical acquisition, the Company had a total balance of cash, cash equivalents, restricted cash and marketable securities of approximately $1.9 billion.

New Share Repurchase Program

The Company's Board of Directors has approved a share repurchase authorization of $1.5 billion in common stock. The Company intends to repurchase at least $1 billion in common stock over the next year, including an accelerated share repurchase (ASR) program to repurchase approximately $500 million in common stock. Azenta intends to enter into an ASR agreement in the coming days.

Repurchases of the Company's common stock may be made in the open market or through privately negotiated transactions (including the ASR program), or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, subject to market and business conditions, legal requirements, and other factors. This share repurchase authorization does not obligate Azenta to acquire any particular amount of common stock, and share repurchases may be commenced or suspended at any time at the Company's discretion.

Board of Directors Nominations

Today the Company announced that Tina S. Nova, Ph.D. and Dorothy E. Puhy have been nominated for election to its Board of Directors at the Company's 2023 Annual General Meeting. Current directors Mark Wrighton, Ph.D. and Alfred Woollacott, III have stated their intention to retire from the Board and not to stand for re-election. Please refer to the Company's separate press release for further information.

Guidance for Continuing Operations for First Quarter and Full Year Fiscal 2023

The Company announced guidance for continuing operations for the first quarter and full year fiscal 2023.

For the first quarter, revenue is expected to be in the range of $175 to $190 million and non-GAAP diluted earnings per share is expected to be in the range of $0.08 to $0.16. GAAP diluted earnings per share from continuing operations is expected to be in the range of ($0.20) to ($0.12)

For the full year, total revenue is expected to grow approximately 30%.

Conference Call and Webcast

Azenta management will webcast its fourth quarter and full year fiscal 2022 earnings conference call today at 4:30 p.m. Eastern Time. During the call, Company management will respond to questions concerning, but not limited to, the Company's financial performance, business conditions and industry outlook. Management's responses could contain information that has not been previously disclosed.

The call will be broadcast live over the Internet and, together with presentation materials referenced on the call, will be hosted at the Investor Relations section of Azenta's website at https://investors.azenta.com/events, and will be archived online on this website for convenient on-demand replay. In addition, you may call 800-936-4761 (US & Canada only) or +1-212-231-2922 for international callers to listen to the live webcast.

Regulation G – Use of Non-GAAP financial Measures

The Company supplements its GAAP financial measures with certain non-GAAP financial measures to provide investors a better perspective on the results of business operations, which the Company believes is more comparable to the similar analyses provided by its peers. These measures are not presented in accordance with, nor are they a substitute for, U.S. generally accepted accounting principles, or GAAP. These measures should always be considered in conjunction with appropriate GAAP measures. A reconciliation of non-GAAP measures to the most nearly comparable GAAP measures is included at the end of this release following the consolidated balance sheets, statements of operations and statements of cash flows.

"Safe Harbor Statement" under Section 21E of the Securities Exchange Act of 1934

Some statements in this release are forward-looking statements made under Section 21E of the Securities Exchange Act of 1934. These statements are neither promises nor guarantees but involve risks and uncertainties, both known and unknown, that could cause Azenta's financial and business results to differ materially from our expectations. They are based on the facts known to management at the time they are made. Other forward-looking statements include but are not limited to statements about our revenue and earnings expectations, our focus and execution and adoption of our offerings, our ability to improve or retain our market position, and our ability to deliver financial success in the future and otherwise related to future operating or financial performance and opportunities. Factors that could cause results to differ from our expectations include the following:  the impact of the COVID-19 global pandemic on the markets we serve, including our supply chain, and on the global economy generally; the volatility of the life sciences markets the Company serves; our possible inability to meet demand for our products due to difficulties in obtaining components and materials from our suppliers in required quantities and of required quality; the inability of customers to make payments to us when due; price competition; disputes concerning intellectual property; uncertainties in global political and economic conditions; our ability to successfully invest the cash proceeds from the sale of our Semiconductor Automation business; and other factors and other risks, including those that we have described in our filings with the Securities and Exchange Commission, including but not limited to our Annual Report on Form 10-K, Current Reports on Form 8-K and our Quarterly Reports on Form 10-Q. As a result, we can provide no assurance that our future results will not be materially different from those projected. Azenta expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in our expectations or any change in events, conditions, or circumstances on which any such statement is based. Azenta undertakes no obligation to update the information contained in this press release.

About Azenta Life Sciences

Azenta, Inc. (Nasdaq: AZTA) is a leading provider of life sciences solutions worldwide, enabling impactful breakthroughs and therapies to market faster. Azenta provides a full suite of reliable cold-chain sample management solutions and genomic services across areas such as drug development, clinical research and advanced cell therapies for the industry's top pharmaceutical, biotech, academic and healthcare institutions globally.

Azenta is headquartered in Massachusetts, with operations in North America, Europe and Asia. For more information, please visit www.azenta.com.

AZENTA INVESTOR CONTACTS: 

Sara Silverman 
Head of Investor Relations 
978.262.2635 
ir@azenta.com

Sherry Dinsmore 
978.262.2400 
sherry.dinsmore@azenta.com

 

AZENTA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(In thousands, except per share data)

 
     

Three Months Ended

   

Year Ended

 
     

September 30, 

   

September 30,

 
     

2022

 

2021

   

2022

 

2021

 
                               

Revenue

                             

Products

   

$

42,944

 

$

53,115

   

$

180,950

 

$

181,036

 

Services

     

94,624

   

83,824

     

374,548

   

332,667

 

Total revenue

     

137,568

   

136,939

     

555,498

   

513,703

 

Cost of revenue

                             

Products

     

26,478

   

25,118

     

100,044

   

96,678

 

Services

     

52,973

   

45,678

     

199,870

   

173,216

 

Total cost of revenue

     

79,451

   

70,796

     

299,914

   

269,894

 

Gross profit

     

58,117

   

66,143

     

255,584

   

243,809

 

Operating expenses

                             

Research and development

     

7,647

   

6,599

     

27,542

   

22,412

 

Selling, general and administrative

     

64,704

   

80,453

     

252,065

   

252,101

 

Restructuring charges

     

393

   

332

     

712

   

385

 

Total operating expenses

     

72,744

   

87,384

     

280,319

   

274,898

 

Operating loss

     

(14,627)

   

(21,241)

     

(24,735)

   

(31,089)

 

Interest income

     

10,353

   

129

     

20,286

   

632

 

Interest expense

     

(478)

   

(552)

     

(4,589)

   

(2,037)

 

Loss on extinguishment of debt

     

   

     

(632)

   

 

Other income (expenses), net

     

1,352

   

(16,212)

     

(266)

   

(16,475)

 

Income (loss) before income taxes

     

(3,400)

   

(37,877)

     

(9,936)

   

(48,969)

 

Income tax provision (benefit)

   

$

1,910

 

$

(15,480)

   

$

1,350

 

$

(20,100)

 

Loss from continuing operations

     

(5,310)

   

(22,397)

     

(11,286)

   

(28,869)

 

(Loss) income from discontinued operations, net of tax

   

$

(15,454)

 

$

44,202

   

$

2,144,145

 

$

139,616

 

Net (loss) income

     

(20,765)

   

21,805

     

2,132,859

   

110,747

 

Basic net (loss) income per share:

   

$

   

$

     

$

   

$

   

Loss from continuing operations

     

(0.07)

   

(0.30)

     

(0.15)

   

(0.39)

 

(Loss) income from discontinued operations, net of tax

   

$

(0.21)

 

$

0.59

   

$

28.63

 

$

1.88

 

Basic net (loss) income per share

     

(0.28)

   

0.29

     

28.48

   

1.49

 

Diluted net (loss) income per share:

   

$

   

$

     

$

   

$

   

Loss from continuing operations

     

(0.07)

   

(0.30)

     

(0.15)

   

(0.39)

 

(Loss) income from discontinued operations, net of tax

   

$

(0.21)

 

$

0.59

   

$

28.63

 

$

1.88

 

Diluted net (loss) income per share

     

(0.28)

   

0.29

     

28.48

   

1.49

 

Weighted average shares used in computing net income per share:

                             

Basic

     

75,010

   

74,330

     

74,897

   

74,229

 

Diluted

     

75,010

   

74,532

     

74,897

   

74,455

 

 

AZENTA, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

(In thousands, except share and per share data)

 
 

September 30, 

 

September 30,

 

2022

 

2021

           

Assets

         

Current assets

         

Cash and cash equivalents

$

658,274

 

$

227,427

Short-term Marketable securities

 

911,764

   

81

Accounts receivable, net

 

163,759

   

119,877

Inventories

 

85,544

   

60,398

Derivative asset

 

124,789

   

Short-term restricted cash

 

382,596

   

7,146

Prepaid expenses and other current assets

 

132,620

   

51,052

Current assets held for sale

 

   

311,385

Total current assets

 

2,459,346

   

777,366

Property, plant and equipment, net

 

154,470

   

130,719

Long-term marketable securities

 

352,020

   

3,598

Long-term deferred tax assets

 

1,169

   

10,043

Goodwill

 

513,623

   

469,356

Intangible assets, net

 

178,401

   

186,534

Other assets

 

57,093

   

58,068

Non-current assets held for sale

 

   

183,828

Total assets

$

3,716,122

 

$

1,819,512

Liabilities and Stockholders' Equity

         

Current liabilities

         

Accounts payable

$

38,654

 

$

42,360

Deferred revenue

 

39,748

   

25,724

Accrued warranty and retrofit costs

 

2,890

   

2,330

Accrued compensation and benefits

 

41,898

   

33,183

Accrued income taxes payable

 

28,419

   

8,711

Accrued expenses and other current liabilities

 

78,937

   

103,841

Current liabilities held for sale

 

   

128,939

Total current liabilities

 

230,546

   

345,088

Long-term debt

 

   

49,677

Long-term tax reserves

 

1,684

   

1,973

Long-term deferred tax liabilities

 

64,555

   

13,030

Long-term pension liabilities

 

261

   

705

Long-term operating lease liabilities

 

49,227

   

45,088

Other long-term liabilities

 

6,463

   

6,173

Non-current liabilities held for sale

 

   

32,444

Total liabilities

 

352,736

   

494,178

Stockholders' Equity

         

Preferred stock, $0.01 par value - 1,000,000 shares authorized, no shares issued or outstanding

 

   

Common stock, $0.01 par value - 125,000,000 shares authorized, 88,482,125 shares issued and
75,020,256 shares outstanding at September 30, 2022, 87,808,922 shares issued and 74,347,053
shares outstanding at September 30, 2021

 

885

   

878

Additional paid-in capital

 

1,992,017

   

1,976,112

Accumulated other comprehensive income

 

(83,916)

   

19,351

Treasury stock at cost - 13,461,869 shares

 

(200,956)

   

(200,956)

Retained earnings (accumulated deficit)

 

1,655,356

   

(470,051)

Total stockholders' equity

 

3,363,386

   

1,325,334

Total liabilities and stockholders' equity

$

3,716,122

 

$

1,819,512

 

AZENTA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(In thousands, except share and per share data)

 
 

Year Ended

 
 

September 30, 

 
 

2022

 

2021

 

Cash flows from operating activities

           

Net income

$

2,132,859

 

$

110,747

 

Adjustments to reconcile net income to net cash provided by operating activities:

           

Depreciation and amortization

 

53,702

   

65,333

 

Impairment of intangible assets

 

   

13,364

 

Stock-based compensation

 

10,666

   

27,456

 

Amortization of premium on marketable securities and deferred financing costs

 

(1,894)

   

225

 

Deferred income taxes

 

24,469

   

(17,265)

 

Loss on extinguishment of debt

 

632

   

 

(Gain) loss on disposals of property, plant and equipment

 

(21)

   

260

 

(Gain) loss on sale of divestiture, net of tax

 

(2,130,265)

   

948

 

Fees paid stemming from divestiture

 

(52,461)

   

 

Taxes paid stemming from divestiture

 

(431,600)

   

 

Changes in operating assets and liabilities, net of acquisitions and divestiture:

           

Accounts receivable

 

(31,397)

   

(69,643)

 

Inventories

 

(66,629)

   

(50,443)

 

Accounts payable

 

(3,926)

   

30,967

 

Deferred revenue

 

16,599

   

(3,939)

 

Accrued warranty and retrofit costs

 

303

   

54

 

Accrued compensation and tax withholdings

 

11,404

   

7,298

 

Other current assets and liabilities

 

1,513

   

34,495

 

Net cash (used in) provided by operating activities

 

(466,046)

 

$

149,857

 

Cash flows from investing activities

           

Purchases of property, plant and equipment

 

(73,435)

   

(52,805)

 

Purchases of technology intangibles

 

(4,000)

   

 

Purchases of marketable securities

 

(1,975,599)

   

(151)

 

Sales and maturities of marketable securities

 

705,384

   

121

 

Proceeds from divestiture, net of cash transferred

 

2,939,116

   

 

Acquisitions / dispositions, net of cash acquired

 

(125,876)

   

(93,712)

 

Adjustment from proceeds from divestiture

 

   

(1,802)

 

Settlement (issuance) of note receivables

 

   

2,000

 

Net cash provided by (used in) investing activities

 

1,465,590

 

$

(146,349)

 

Cash flows from financing activities

           

Proceeds from issuance of common stock

 

5,245

   

5,812

 

Principal payments on debt

 

(49,725)

   

(828)

 

Payments of finance leases

 

(388)

   

(1,164)

 

Payment for contingent consideration related to acquisition

 

(10,400)

   

 

Common stock dividends paid

 

(7,494)

   

(29,726)

 

Net cash used in financing activities

$

(62,762)

 

$

(25,906)

 

Effects of exchange rate changes on cash and cash equivalents

 

(180,819)

   

5,205

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

755,963

   

(17,193)

 

Cash, cash equivalents and restricted cash, beginning of period

 

285,333

   

302,526

 

Cash, cash equivalents and restricted cash, end of period

 

1,041,296

 

$

285,333

 

Supplemental disclosures:

           

Cash paid for interest

 

469

   

1,435

 

Cash paid for income taxes, net

$

482,090

 

$

38,020

 
             
             
   

September 30, 

   

September 30, 

   

2022

   

2021

Cash and cash equivalents of continuing operations

 

658,274

   

227,427

 

Cash and cash equivalents included in assets held for sale

 

   

45,000

 

Short-term restricted cash

 

382,595

   

7,145

 

Long-term restricted cash included in other assets

 

427

   

5,761

 

Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash
flows

$

1,041,296

 

$

285,333

 
 

Notes on Non-GAAP Financial Measures

Non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management adjusts the GAAP results for the impact of amortization of intangible assets, restructuring charges, purchase price accounting adjustments and charges related to M&A to provide investors better perspective on the results of operations which the Company believes is more comparable to the similar analysis provided by its peers.  Management also excludes special charges and gains, such as impairment losses, gains and losses from the sale of assets, certain tax benefits and charges, as well as other gains and charges that are not representative of the normal operations of the business. Management strongly encourages investors to review our financial statements and publicly filed reports in their entirety and not rely on any single measure.

                                     
   

Quarter Ended

   

September 30, 2022

 

June 30, 2022

 

September 30, 2021

       

per diluted

     

per diluted

     

per diluted

Dollars in thousands, except per share data    

 

$

 

share

 

$

 

share

 

$

 

share

Net loss from continuing operations

 

$

(5,310)

 

$

(0.07)

 

$

(7,015)

 

$

(0.09)

 

$

(22,397)

 

$

(0.30)

Adjustments:

                                   

Amortization of intangible assets

   

8,801

   

0.12

   

7,557

   

0.10

   

9,515

   

0.13

Impairment of intangible assets

   

   

   

   

   

13,364

   

0.18

Restructuring charges

   

393

   

0.01

   

23

   

0.00

   

332

   

0.00

Merger and acquisition costs

   

6,959

   

0.09

   

1,662

   

0.02

   

8,427

   

0.11

Rebranding and transformation costs

   

536

   

0.01

   

289

   

0.00

   

827

   

0.01

Indemnification asset release

   

   

   

   

   

16,007

   

0.21

Tax adjustments (1)

   

2,510

   

0.03

   

8,417

   

0.11

   

(10,345)

   

(0.14)

Tax effect of adjustments 

   

(2,130)

   

(0.03)

   

(2,143)

   

(0.03)

   

(6,967)

   

(0.09)

Non-GAAP adjusted net income from continuing
operations

 

$

11,759

 

$

0.16

 

$

8,790

 

$

0.12

 

$

8,763

 

$

0.12

   Stock based compensation, pre-tax

   

(49)

   

(0.00)

   

3,485

   

0.05

   

5,138

   

0.07

   Tax rate

   

15

%

 

   

15

%

 

   

15

%

 

Stock-based compensation, net of tax

   

(42)

   

(0.00)

   

2,962

   

0.04

   

4,367

   

0.06

Non-GAAP adjusted net income excluding stock-
based compensation - continuing operations

 

$

11,717

 

$

0.16

 

$

11,752

 

$

0.16

 

$

13,131

 

$

0.18

                                     

Shares used in computing non-GAAP diluted net
income per share

   

   

75,010

   

   

74,989

   

   

74,532

 

                           
     

Year Ended

     

September 30, 2022

 

September 30, 2021

         

per diluted

     

per diluted

Dollars in thousands, except per share data    

   

$

 

share

 

$

 

share

Net loss from continuing operations

   

$

(11,286)

 

$

(0.15)

 

$

(28,869)

 

$

(0.39)

Adjustments:

                         

Amortization of intangible assets

     

32,289

   

0.43

   

37,372

   

0.50

Restructuring charges

     

712

   

0.01

   

385

   

0.01

Tariff adjustment

     

(484)

   

(0.01)

   

5,497

   

0.07

Merger and acquisition costs

     

17,929

   

0.24

   

20,662

   

0.28

Impairment of intangible assets

     

   

   

13,364

   

0.18

Rebranding and transformation costs

     

2,741

   

0.04

   

827

   

0.01

Indemnification asset release

     

   

   

16,007

   

0.21

Loss on extinguishment of debt

     

632

   

0.01

   

   

Other adjustments

     

   

   

(83)

   

(0.00)

Tax adjustments (1)

     

5,744

   

0.08

   

(11,919)

   

(0.16)

Tax effect of adjustments

     

(10,078)

   

(0.13)

   

(17,314)

   

(0.23)

Non-GAAP adjusted net income from continuing operations

   

$

38,199

 

$

0.51

 

$

35,929

 

$

0.48

Stock-based compensation, pre-tax

     

12,443

   

0.17

   

20,051

   

0.27

Tax rate

     

15

%

 

   

15

%

 

Stock-based compensation, net of tax

     

10,577

 

$

0.14

   

17,043

   

0.23

Non-GAAP adjusted net income excluding stock-based compensation - continuing operations

   

$

48,776

 

$

0.65

 

$

52,972

 

$

0.71

                           

Shares used in computing non-GAAP diluted net income per share

     

   

74,897

   

   

74,455

(1) Tax adjustments during all periods include adjustments to tax benefits related to stock compensation windfalls. These benefits are recognized in the period of vesting for US GAAP but included in the annual effective tax rate for Non-GAAP reporting.   Tax adjustments for the quarter ended September 30, 2022, include a $4.1M increase to expense related to the exclusion of allocations between continuing operations and discontinued operations. 

                               
   

Quarter Ended

 

Year Ended

   

September 30, 

 

June 30, 

 

September 30, 

 

September 30, 

 

September 30, 

Dollars in thousands

 

2022

 

2022

 

2021

 

2022

 

2021

GAAP net (loss) income

 

$

(20,765)

 

$

(9,570)

 

$

21,805

 

$

2,132,859

 

$

110,747

Less: Income from discontinued operations

   

15,454

   

2,555

   

(44,201)

   

(2,144,145)

   

(139,616)

GAAP net (loss) income from continuing operations

   

(5,310)

   

(7,015)

   

(22,397)

   

(11,286)

   

(28,869)

Adjustments:

                             

Less: Interest income

   

(10,353)

   

(6,822)

   

(129)

   

(20,286)

   

(632)

Add: Interest expense

   

478

   

2,101

   

552

   

4,589

   

2,037

Add / Less: Income tax provision (benefit)

   

1,910

   

7,293

   

(15,480)

   

1,350

   

(20,100)

Add: Depreciation

   

6,087

   

5,253

   

5,055

   

21,864

   

19,488

Add: Amortization of completed technology

   

1,901

   

1,810

   

1,873

   

7,325

   

8,073

Add: Amortization of customer relationships and acquired intangible assets

   

6,900

   

5,745

   

7,642

   

24,956

   

29,299

Add: Loss on extinguishment of debt

   

   

   

   

632

   

Earnings before interest, taxes, depreciation and amortization - Continuing operations

 

$

1,613

 

$

8,365

 

$

(22,884)

 

$

29,144

 

$

9,296

 

                               
   

Quarter Ended

 

Year Ended

   

September 30, 

 

June 30, 

 

September 30, 

 

September 30, 

 

September 30, 

Dollars in thousands

 

2022

 

2022

 

2021

 

2022

 

2021

Earnings before interest, taxes, depreciation and amortization - Continuing operations

 

$

1,613

 

$

8,365

 

$

(22,884)

 

$

29,144

 

$

9,296

Adjustments:

                             

Add: Stock-based compensation

   

(49)

   

3,485

   

5,138

   

12,443

   

20,051

Add: Restructuring charges

   

393

   

23

   

332

   

712

   

385

Add: Merger and acquisition costs

   

6,959

   

1,664

   

8,427

   

17,929

   

20,662

Add: Tariff adjustment

   

   

   

   

(484)

   

5,497

Impairment of intangible assets

   

   

   

13,364

   

   

13,364

Add: Rebranding and transformation costs

   

536

   

289

   

827

   

2,741

   

827

Indemnification asset release

   

   

   

16,007

   

   

16,007

Less: Other adjustments

   

   

   

   

   

(83)

Adjusted earnings before interest, taxes, depreciation and amortization - Continuing operations

 

$

9,452

 

$

13,826

 

$

21,211

 

$

62,485

 

$

86,006

 

                                     
   

Quarter Ended

 

Dollars in thousands

 

September 30, 2022

   

June 30, 2022

   

September 30, 2021

 

GAAP gross profit

 

$

58,117

 

42.2

%

 

$

59,600

 

44.9

%

 

$

66,143

 

48.3

%

Adjustments:

                                   

Amortization of completed technology

   

1,901

 

1.4

     

1,812

 

1.4

     

1,873

 

1.4

 

   Other adjustment

   

289

 

0.2

     

 

     

 

 

Non-GAAP adjusted gross profit

 

$

60,307

 

43.8

%

 

$

61,412

 

46.3

%

 

$

68,016

 

49.7

%

                                     

 

                                                                         
   

 Life Sciences Products

 

Life Sciences Services

   

Quarter Ended

 

Quarter Ended

Dollars in thousands

 

September 30, 2022

   

June 30, 2022

   

September 30, 2021

   

September 30, 2022

   

June 30, 2022

   

September 30, 2021

 

GAAP gross profit

 

$

19,068

 

39.4

%

 

$

21,026

 

44.4

%

 

$

25,329

 

47.7

%

 

$

39,057

 

43.8

%

 

$

38,564

 

45.2

%

 

$

40,815

 

48.7

%

Adjustments:

                                                                       

Amortization of completed technology

   

401

 

0.8

     

251

 

0.5

     

132

 

0.2

     

1,500

 

1.7

     

1,562

 

1.8

     

1,741

 

2.1

 

Other adjustment

   

 

     

 

     

 

     

289

 

0.3

     

 

     

 

 

Non-GAAP adjusted gross profit

 

$

19,469

 

40.3

%

 

$

21,277

 

44.9

%

 

$

25,461

 

47.9

%

 

$

40,846

 

45.8

%

 

$

40,126

 

47.0

%

 

$

42,556

 

50.8

%

                                                                         

 

                         
   

Year Ended

 

Dollars in thousands

 

September 30, 2022

   

September 30, 2021

 

GAAP gross profit

 

$

255,584

 

46.0

%

 

$

243,809

 

47.5

%

Adjustments:

                       

Amortization of completed technology

   

7,325

 

1.3

     

8,073

 

1.6

 

Other adjustment

   

289

 

0.0

     

(83)

 

0.0

 

Tariff adjustment

   

(484)

 

(0.1)

     

5,497

 

1.1

 

Non-GAAP adjusted gross profit

 

$

262,714

 

47.3

%

 

$

257,296

 

50.1

%

 

                                               
   

Life Sciences Products

Life Sciences Services

   

Year Ended

Year Ended

Dollars in thousands

 

September 30, 2022

 

September 30, 2021

September 30, 2022

 

September 30, 2021

GAAP gross profit

 

$

89,074

 

44.7

%

 

$

92,560

 

46.4

%

$

166,523

 

46.7

%

 

$

151,246

 

48.2

%

Adjustments:

                                             

Amortization of completed technology

   

1,122

 

0.6

     

1,117

 

0.6

   

6,202

 

1.7

     

6,957

 

2.2

 

Other adjustment

   

 

     

 

   

289

 

0.1

     

(83)

 

(0.0)

 

Tariff adjustment

   

 

     

 

   

(484)

 

(0.1)

     

5,497

 

1.8

 

Non-GAAP adjusted gross profit

 

$

90,196

 

45.2

%

 

$

93,677

 

46.9

%

$

172,530

 

48.4

%

 

$

163,617

 

52.1

%

                                               

 

                                     
   

 Life Sciences Products

 

Life Sciences Services

   

Quarter Ended

 

Quarter Ended

   

September 30, 

 

June 30, 

 

September 30, 

 

September 30, 

 

June 30, 

 

September 30, 

Dollars in thousands

 

2022

 

2022

 

2021

 

2022

 

2022

 

2021

GAAP operating loss

 

$

(141)

 

$

1,965

 

$

6,470

 

$

12

 

$

688

 

$

2,602

Adjustments:

                                   

Amortization of completed technology

   

401

   

251

   

132

   

1,500

   

1,562

   

1,741

Other adjustment

   

   

   

   

339

   

   

Tariff adjustment

   

   

   

   

   

   

Non-GAAP adjusted operating profit

 

$

260

 

$

2,216

 

$

6,602

 

$

1,851

 

$

2,250

 

$

4,343

 

                                                       
   

Total Segments

 

Corporate

 

Total

   

Quarter Ended

 

Quarter Ended

 

Quarter Ended

   

September 30, 

 

June 30, 

 

September 30, 

 

September 30, 

 

June 30, 

 

September 30, 

 

September 30, 

 

June 30, 

 

September 30, 

Dollars in thousands

 

2022

 

2022

 

2021

 

2022

 

2022

 

2021

 

2022

 

2022

 

2021

GAAP operating profit (loss)

 

$

(129)

 

$

2,654

 

$

9,072

 

$

(14,490)

 

$

(7,736)

 

$

(30,313)

 

$

(14,619)

 

$

(5,082)

 

$

(21,241)

Adjustments:

         

                                         

Amortization of completed technology

   

1,901

   

1,813

   

1,873

   

   

   

   

1,901

   

1,813

   

1,873

Amortization of customer relationships and
acquired intangible assets

   

   

   

   

6,900

   

5,745

   

7,642

   

6,900

   

5,745

   

7,642

Restructuring charges

   

   

   

   

393

   

22

   

333

   

393

   

22

   

333

Tariff adjustment

   

   

   

   

   

   

13,364

   

   

   

13,364

Rebranding and transformation costs

   

   

   

   

536

   

289

   

827

   

536

   

289

   

827

Other adjustment

   

339

   

   

   

(339)

   

   

   

   

   

Merger and acquisition costs

   

   

   

   

6,959

   

1,662

   

8,427

   

6,959

   

1,662

   

8,427

Non-GAAP adjusted operating profit (loss)

 

$

2,111

 

$

4,467

 

$

10,945

 

$

(41)

 

$

(18)

 

$

280

 

$

2,070

 

$

4,449

 

$

11,225

 

                         
   

Life Sciences Products

 

Life Sciences Services

   

Year Ended

 

Year Ended

Dollars in thousands

 

September 30, 

 

September 30, 

 

September 30, 

 

September 30, 

   

2022

 

2021

 

2022

 

2021

GAAP operating profit

 

$

11,033

 

$

21,971

 

$

10,784

 

$

10,289

Adjustments:

                       

Amortization of completed technology

   

1,122

   

1,117

   

6,202

   

6,957

Other adjustment

   

   

   

345

   

(83)

Tariff adjustment

   

   

   

(484)

   

5,497

Non-GAAP adjusted operating profit

 

$

12,155

 

$

23,088

 

$

16,847

 

$

22,659

 

                                     
   

Total Segments

 

Corporate

 

Total

   

Year Ended

 

Year Ended

 

Year Ended

Dollars in thousands

 

September 30, 

 

September 30, 

 

September 30, 

 

September 30, 

 

September 30, 

 

September 30, 

   

2022

 

2021

 

2022

 

2021

 

2022

 

2021

GAAP operating profit (loss)

 

$

21,817

 

$

32,260

 

$

(46,552)

 

$

(63,349)

 

$

(24,735)

 

$

(31,089)

Adjustments:

                                   

Amortization of completed technology

   

7,324

   

8,073

   

   

   

7,324

   

8,073

Amortization of customer relationships and acquired intangible assets

   

   

   

24,965

   

29,299

   

24,965

   

29,299

Restructuring charges

   

   

   

712

   

385

   

712

   

385

Tariff adjustment

   

(484)

   

5,497

   

   

   

(484)

   

5,497

Impairment of intangible assets

   

         

   

13,364

   

   

13,364

Rebranding and transformation costs

   

   

   

2,741

   

827

   

2,741

   

827

Other adjustment

   

345

   

(83)

   

(345)

   

   

   

(83)

Merger and acquisition costs

   

   

   

17,929

   

20,662

   

17,929

   

20,662

Non-GAAP adjusted operating profit (loss)

 

$

29,002

 

$

45,747

 

$

(550)

 

$

1,188

 

$

28,452

 

$

46,935

The Company has referenced in the explanation of revenue the estimated impact of COVID. Estimated impact of COVID includes the estimated revenue contribution from products delivered and services rendered to support COVID testing and research, and estimated constraints on the business due to disruptions in customer demand or the Company's ability to deliver in the COVID environment.

                                                       
   

Life Sciences Products

 

Life Sciences Services

 

Azenta Total

   

Year Ended

 

Year Ended

 

Year Ended

Dollars in millions

 

September 30, 2022

 

September 30, 2021

 

Change

 

September 30, 2022

 

September 30, 2021

 

Change

 

September 30, 2022

 

September 30, 2021

 

Change

 Revenue

 

$

199

 

$

200

 

(0)

%

 

$

356

 

$

314

 

13

%

 

$

555

 

$

514

 

8

%

Acquisitions/divestitures

   

7

   

 

(4)

%

   

1

   

 

%

   

8

   

 

(2)

%

Currency exchange rates

   

(6)

   

 

3

%

   

(5)

   

 

2

%

   

(11)

   

 

2

%

Organic revenue

   

198

   

200

 

(1)

%

   

360

   

314

 

15

%

   

558

   

514

 

9

%

Estimated impact of COVID

   

22

   

45

 

14

%

   

(1)

   

8

 

3

%

   

22

   

53

 

8

%

Organic revenue ex COVID

 

$

176

 

$

155

 

13

%

 

$

361

 

$

306

 

18

%

 

$

537

 

$

461

 

17

%

                                                       
   

Life Sciences Products

 

Life Sciences Services

 

Azenta Total

   

Quarter Ended

 

Quarter Ended

 

Quarter Ended

Dollars in millions

 

September 30, 2022

 

September 30, 2021

 

Change

 

September 30, 2022

 

September 30, 2021

 

Change

 

September 30, 2022

 

September 30, 2021

 

Change

 Revenue

 

$

48

 

$

53

 

(9)

%

 

$

89

 

$

84

 

6

%

 

$

138

 

$

137

 

0

%

Acquisitions/divestitures

   

4

   

 

(8)

%

   

   

 

%

   

4

   

 

(3)

%

Currency exchange rates

   

(3)

   

 

7

%

   

(3)

   

 

3

%

   

(6)

   

 

4

%

Organic revenue

   

48

   

53

 

(10)

%

   

92

   

84

 

10

%

   

139

   

137

 

2

%

Estimated impact of COVID

   

   

11

 

23

%

   

1

   

2

 

1

%

   

1

   

12

 

10

%

Organic revenue ex COVID

 

$

48

 

$

42

 

13

%

 

$

91

 

$

82

 

11

%

 

$

139

 

$

125

 

12

%

 

SOURCE Azenta, Inc.

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